AccorHotels wants to evolve from a hospitality company to a services and experience platform for travelers and locals alike. CEO Bazin is willing to take risks to achieve this goal, even if some of the company's investments don't ever pay off.
AccorHotels hasn’t been shy about espousing its vision for a platform that stretches beyond the confines of a traditional hospitality company.
Sébastien Bazin, CEO of AccorHotels Group, said at Skift Forum Europe 2018 that his ambition is to compete against global giants like Facebook, Tencent, Baidu, and Apple for mindshare among global consumers. Creating compelling products and experiences for locals in addition to travelers is a core component of future-proofing the European hotel giant.
“The company was a sleeping giant, but we were too introverted, too shy,” Bazin told Skift Hospitality Editor Deanna Ting. “… if we were to continue over the next 50 years only offering [hotel rooms], we were going to have a tough wake up call in ten years from today because we need to enlarge the number of services we provide to travelers to go beyond providing accommodations and a hotel room.”
This is part of the reasoning behind AccorHotels’ spending spree over the last few years; although Bazin expects 20 percent of his investments to be unsuccessful, those that do work out will help push the company forward in a competitive global marketplace.
AccorHotels itself helped pioneer the asset-light model that hotel chains across the world adopted after the Great Recession, moving to a branding and management model instead of owning every property, so it’s not surprising that it has looked beyond hotel brands to find its way forward. So far, according to Bazin, the company has invested $726 million (630 million euro) in acquisitions, which represents just five percent of AccorHotels’ market cap.
“I want to make sure Accor will be in your everyday life; I need to provide you more than a hotel room because I’m only going to see you in our hotel room three or four times a year,” said Bazin. “You are going to be on Facebook six times a day, on Google probably two or three times a day. I need to have touchpoints and contact with you when you’re not traveling. I’m enlarging the net; when you want to go to a certain category [accommodation], when you want to go to a restaurant, to a digital concierge, we’ve been acquiring companies to enlarge the efficacy even when you don’t travel.”
Speaking of the intense competition among hotel giants, Bazin said that while Accor will never dominate the U.S. or Chinese markets due to the strength of existing brands, the company will do whatever it takes to lead the industry in Europe, Africa, and Latin America. Its concentration in these markets also undergirds its strength in digital distribution and e-commerce.
“I will never be the largest operator in China because it is dominated by two or three big guys,” said Bazin. “But I will never let the door open to anybody else to be the largest operator in Europe, South America, Africa, Middle East, or the Asia Pacific because [we are the largest operator today]. When you have leadership someplace and a chance to accelerate your leadership, [and the chance] to penetrate a market deeper, just do it. When you control the market you have a much better interaction with the digital space.”
Bazin also gave some background on how he views Airbnb’s rise in the hospitality space. While the sharing economy has had an impact on leisure travel, business travelers and corporations still make up the majority of business for AccorHotels’ brands.
“Why did we go into the sharing economy?” mused Bazin, referring to his acquisitions of Onefinestay along with other sharing economy companies. “Airbnb successfully did it, and we should have thought about it 15 years ago, except we were so product-minded… 90 percent of my business is less than two nights, 90 percent of Airbnb’s business is more than three nights.
“It’s not the same mix, and 70 percent of my business is business-to-business corporate,” he added, “while 90 percent of Airbnb is business-to-consumer leisure. So we’ve been impacting each other but we’re basically not in the same field. Airbnb is not service-oriented, so we decided to go into the upscale chain of the sharing economy.”
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Photo credit: CEO of AccorHotels Group Sébastien Bazin, right, at Skift Forum Europe 2018. Bazin detailed his company's investments in a variety of businesses outside the traditional hotel hospitality space. Fabrice Malard / AccorHotels